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China'S Cotton Textile Industry In June 2020: Decreasing Rate For Two Consecutive Months

2020/7/23 10:09:00 0

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Cotton Textile Industry Decline Narrowed

In June, the cotton textile boom index was 48.94, with the decline rate narrowing for two consecutive months. This month, the textile market pressure gradually increased. In terms of raw materials, in order to reduce the pressure of capital and inventory, the main procurement method is to buy as you use it; In terms of production, the start-up rate of this month increased slightly, and the production of gauze increased compared with that of last month; In terms of product sales and inventory, conventional products are better than combed cotton products, and textile enterprises sell at lower prices, hoping to recover funds as soon as possible. However, orders are relatively light and production exceeds sales, and product inventory is still increasing.

On the domestic side, on June 30, the State Grain and material reserve bureau and the Ministry of Finance officially announced that the rotation policy of public concern was finally implemented. The implementation of the "circuit breaker" mechanism: when the domestic market cotton spot price index is lower than 11500 yuan / ton, trading will be suspended from the next working day to strongly support the domestic cotton price. According to the survey conducted by China Cotton Textile Industry Association (hereinafter referred to as the China Cotton Association), more than 70% of the surveyed enterprises think that it is beneficial for textile enterprises to store cotton abroad. At the same time, some textile enterprises said that at present, traders auction more reserves, squeezing the storage space of textile enterprises auction. During the rotation period, the enthusiasm of the auction and storage enterprises was high. As of the publication date, all transactions were kept, and the price increase gradually returned to rationality.

According to the General Administration of foreign trade, the overall performance of China's import and export in July is expected to be good. In the first half of this year, China's textile and garment exports totaled US $125.19 billion, a year-on-year increase of 3.16% (in RMB terms, a year-on-year increase of 6.75%), and the overall export of the industry recovered to positive growth. Among them, textile exports from January to June totaled 74.103 billion U.S. dollars, a year-on-year increase of 27.81% (in terms of RMB, a year-on-year increase of 32.37%); clothing exports totaled $51.08 billion, a year-on-year decrease of 19.39% (in terms of RMB, a year-on-year decrease of 16.67%). China's textile export market is still affected by the weak export demand of textile and domestic textile enterprises.

Due to the sluggish recovery of foreign consumer market and the slow recovery of orders, many foreign trade enterprises choose "export to domestic sales" to open up the domestic market. In view of this situation, the general office of the State Council issued the implementation opinions on supporting the transformation of export products into domestic sales, supported the development of domestic market for marketable export products, and made efforts to help foreign trade enterprises tide over difficulties, so as to get a respite while waiting for the recovery of foreign markets.

Raw material purchasing index

In June, the raw material purchasing index was 51.57, returning to the boom range. In June, cotton prices at home and abroad kept fluctuating and rising within the range, and the average difference between domestic and foreign cotton prices was about 300 yuan. In the first ten days of June, domestic cotton prices fluctuated due to factors such as no obvious recovery in domestic and foreign demand side, Trump's statement that he would take suppression action against China, and market concerns caused by the rebound of local epidemic situation. In the late June, the news that the reserve cotton rotation was about to start attracted wide attention from the market, and the domestic cotton price rose slightly under the stimulation of Indian locust disaster speculation and other factors. On June 30, the plan for the rotation of reserved cotton was officially finalized. Some textile enterprises said that considering the current product structure, they would purchase and use reserved cotton, but affected by market and capital pressure, they would not purchase in large quantities. Non cotton fibers continue to maintain weak operation. The main reason is still the low demand of downstream. Although there is good news to stimulate the price rise, the raw material price has not been rigidly supported. At present, many chemical fiber enterprises have announced plans to stop and reduce production to stabilize prices.

According to the specific data, the average price of 3128 cotton was 12172 yuan / ton, up 280 yuan / ton on a month on month basis; the average cotook a index was 67.79 cents / pound, up 2.21 cents / pound; the average price of mainstream viscose fiber was 8888 yuan / ton, up 51 yuan / ton; the short average price of 1.4d direct spinning polyester was 5845 yuan / ton, up 97 yuan / ton on a month on month basis.

Stock index of raw materials

In June, the raw material inventory index was 49.08, up 0.43 from the previous month. In June, in order to minimize the inventory pressure, textile enterprises mainly purchased raw materials on rigid demand. According to the tracking data of China Cotton Association, the consumption of raw materials increased by 4.78% month on month, raw cotton inventory decreased by 2.9% month on month, and non cotton fiber inventory decreased by 1.01% month on month. This month, the market did not improve significantly, the product inventory continued to accumulate, the pressure of enterprise working capital did not decrease, and the purchase of raw materials was more cautious. According to the questionnaire of China Cotton Association, most textile enterprises expect that the market will remain weak in July, and the inventory of raw materials will remain at a low level.

Index production

In June, the production index was 50.75, and the output of products increased month on month. The results of the questionnaire of China Cotton Industry Association showed that the starting rate and yarn and cloth output rose month on month. Affected by the epidemic situation in the first half of the year, domestic consumption demand decreased significantly, and downstream procurement was light. Except for a rebound in March, the production rhythm of other months decreased month on month. At present, it has reached a low level, and employees implement the rotation system. In order to stabilize employment, some textile enterprises increased the proportion of low count yarn production this month, so the starting rate and output increased. According to the understanding of the China Cotton Association, some textile enterprises consider reducing salary to reduce expenses, but at the same time, they are worried about whether the employees will leave after the salary reduction. ?

Product sales index

In June, the product sales index was 48.22. This month, the market has entered the off-season, the product price center of gravity has shifted downward, the sales are weak, the market is mainly domestic sales, and de stocking is still the main direction of work. According to the understanding of China Cotton Association, at present, textile enterprises' orders are mainly domestic small orders and supplementary orders, and the sales pressure has increased with the arrival of the off-season. The conventional products rely on price reduction, but the downstream procurement is still cold. Some textile enterprises said that the inquiry for foreign trade orders had increased, and the orders were mainly epidemic prevention materials or functional products with antibacterial properties. The demand of combed products is still lower than that of conventional products. The main impact of the reduction of orders on the current market is the gradual recovery of orders.

Product inventory index

In June, the product inventory index was 48.17, and the inventory pressure increased. According to the survey of China Cotton Association, 40.57% of the enterprises interviewed said that their product inventory increased month on month, mainly due to the increase in the output of conventional products, but the sales speed was lower than the production speed, and the product inventory of textile enterprises continued to accumulate. It is understood that textile enterprises have been psychologically prepared for the sales and inventory of products this month, so they do not have much worry. However, the inventory of products occupies a large amount of working capital, resulting in tension in the cash chain. It is expected that textile enterprises will continue to reduce prices and sell goods in July to alleviate the pressure on inventory.

Business operation index

In June, the business index was 46.60. This month, most textile enterprises in order to reduce inventory, circulation funds to choose parity or even loss shipping. However, the price of textile products is not strong enough. In addition, the problem of difficult and expensive financing still plagues textile enterprises. The textile industry has the characteristics of heavy assets and labor-intensive, and has a large amount of capital investment. If the capital chain breaks, it will lead to chain reaction. We hope that the relevant departments can increase financing support and help textile enterprises survive the "epidemic winter". ?

At present, the recovery of domestic and foreign consumption demand is not as expected, and it will take a long time for substantial improvement. These situations are already within the expectation of textile enterprises, and further measures will be taken to increase revenue and reduce expenditure. In the second half of the year, the external situation is still grim, and it is still unknown when foreign economic activities will return to normal. From the current customs data, the demand for foreign clothing is still at a low level. However, it is believed that with the economic restart of most countries and the gradual liberalization of residents' consumption and production activities, the demand for textiles will pick up and the foreign trade situation will improve. ?

explain: The prosperity index of China's cotton textile industry is collected from nearly 500 secondary cotton textile enterprises in China, and the formulation methods of national manufacturing PMI and other indexes are referred, Through the weighted calculation of several main indicators, when the index is higher than 50, it means that the prosperity degree of the cotton textile industry in the current month is better than that of the previous month, and if it is lower than 50, it means that the prosperity degree of the current month is less than that of the previous month.